Oil Prices Edge Up Amid Red Sea Shipping Disruptions

Crude oil prices posted modest gains in early trading Monday, with international benchmarks rising more than U.S. prices as geopolitical tensions continued to threaten key shipping lanes. West Texas Intermediate (WTI) crude for September delivery rose 18 cents to settle at $82.58 per barrel, a gain of 0.22%. The global benchmark, Brent crude, climbed 53 cents to $89.05 per barrel, a 0.6% increase, according to live price data.

The price support stems from ongoing disruptions in the Red Sea. According to a report from OilPrice.com, heightened risks to shipping safety have prompted some Asian refiners to ask Saudi Aramco to change the pickup point for crude oil cargoes. At least two Asia-based refiners have requested to pick up their September allocations from Egypt’s Mediterranean port of Sidi Kerir instead of the Saudi Red Sea port of Yanbu, as vessel owners grow increasingly reluctant to pass through the Bab el-Mandeb Strait.

The Iran-aligned Houthis in Yemen have threatened to blockade Saudi shipments in the area and have claimed several attacks on oil tankers since late July. In response, Saudi Arabia has been shuttling more crude via tankers to Egypt's Ain Sukhna port, then using the SUMED onshore pipeline to Sidi Kerir. Aramco has reportedly re-routed some cargoes and asked refiners in South Korea and Japan to pick up volumes at the Egyptian port, though most Chinese, Indian, and Taiwanese refiners were still asked to load from Yanbu.

This logistical reshuffling adds cost and complexity to global crude movements, providing a floor under prices. However, the potential for one refiner to scrap its monthly term allocation due to higher shipping costs highlights the demand-side pressure that can limit price rallies.

For Bakken operators, the local price benchmark showed a discount. Bakken crude at the Clearbrook, Minnesota, hub traded at a differential of $3.42 below WTI, meaning Bakken was priced around $79.16 per barrel. Meanwhile, natural gas prices fell 9 cents to $2.65 per MMBtu, reflecting continued weak fundamentals for the associated gas produced in the oil patch.

The modest gains in crude, particularly for the Brent benchmark, suggest the market is balancing persistent geopolitical supply risks against concerns over global economic growth and fuel demand. The situation in the Red Sea remains a key watch point for traders, as further escalation or sustained disruption could tighten physical supplies to key Asian markets, potentially widening the spread between Brent and WTI.